Lidl tells suppliers to cover no-deal Brexit costs

The German discounter wrote to suppliers last week asking for their confirmation that they would be “deliver duty paid-ready” as the possibility of the UK crashing out of the EU without a deal becomes increasingly likely.

In the event of a no-deal Brexit, the transportation of goods to and from the EU would be hit by tariffs under World Trade Organisation rules.

According to The Sunday Times, two suppliers have confirmed receiving Lidl’s call for suppliers to cover these anticipated costs.

The first said that “Lidl obviously believes we will reach that situation, and what it is saying is it wants us to pay the duty”, while the second said he expects the discounter to “take us to the precipice and threaten to delist our products” during negotiations on costs.

Boris Johnson has said that he does not want to impose tariffs on imports, but the Government will not be able to control tariffs on exports in the event of no-deal, which will put the onus on companies exporting products to decide who will pay for increased costs.

In the event of a no-deal Brexit, exports to the EU would be subject to an average tariff of 45% on dairy products, 18% on meat and 12% on fruit and vegetables.

Suppliers to Irish supermarkets are understood to be exploring rearranging freight routes to bypass the UK entirely in a bid to avoid increased costs.

Lidl Ireland said it is working with suppliers to avoid any potential barriers which might results from Brexit and that all of its supplier contracts included a delivery duty clause.